Cameroon receives €150m loan from AfDB to promote its energy potential
The Board of Directors of the African Development Bank Group (AfDB) has approved a loan of € 150m to help finance the 420 MW Nachtigal hydroelectric project, with the financial support of other partners.
Nachtigal, will come online in 2022, thereby increasing the county’s existing electricity installed capacity by 30%. This will also help to lower the cost of electricity in the long-term.
The project is in line with the AfDB’s initiative to promote renewable energy, whose share of the electricity generation portfolio increased from 14% during 2007- 2011 to 70% between 2012 and 2017.
The Board of Directors of the Bank recalled the current challenges in Cameroon’s electricity sector and expressed their support for an integrated approach to address the challenges adequately and efficiently with the assistance of other development partners.
The 420 MW run-of-river hydroelectric power plant, jointly designed and developed by the Republic of Cameroon, EDF International-Electricité de France and the International Finance Corporation (IFC), is an essential component of the National Development Plan for the electricity sector and a key priority for the country.
The AfDB provided advisory services to the Government through the African Legal Support Facility (ALSF), to ensure that the project was well grounded.
Nachtigal will provide clean and reliable energy at a competitive price, thereby boosting economic growth and increasing job creation, while bridging the energy gaps in Cameroon and the central Africa sub-region. The hydropower facility will help reduce the use of fossil fuels, and make positive environmental and socio-economic impact in the surrounding communities.
The project fits perfectly with one of the AfDB’s High 5 priorities – "Light up and power Africa". It is also consistent with the Bank's Ten Year Strategy (2013-2022), and its intervention strategy in Cameroon. It is in line with the country's Vision 2035, which seeks to transform the country into an emerging industrialized economy, with the capacity to produce sufficient energy to meet its needs.
The Bank’s intervention responds to the urgent need to build additional production capacity that would make a major impact in accelerating the country development. In addition, it complements the investments already made in Cameroon’s power sector (ENEO, Kribi, Dibamba, Lom Pangar, PRERETD) by strengthening and extending electricity transmission networks) and demonstrates the AfDB’s strong commitment to the development of Cameroon's energy sector.